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The latest fund performance figures for January confirm the startling turnround in the fortunes of many of last year's losers.

Markets rallied during the month on the back of good news from the US economy, where manufacturing orders rose and unemployment fell. The belated realisation that the European Central Bank's offer of cheap three-year loans was a bit of a masterstroke by its new president, Mario Draghi, also boosted investor confidence.

The result was a dramatic return to 'risk on' after the 'risk off' mood in the second half of last year. In January the MSCI AC World total return index gained 5.6%, its strongest January since 1997. Emerging markets stormed back with an 11.4% advance, while the US and Europe equity markets both returned 4.7%.

The revival in shares did not harm corporate bond markets either. Higher risk and higher yielding 'junk' bonds rose 2.9% in the US and by 6.6% in Europe, according to Merrill Lynch Wealth Management.

A look at the latest fund performance data on Citywire Money shows the dramatic turnround.

As a result several emerging markets funds managed to recoup most of their losses from the second half of last year.

There was a similar picture in funds investing in UK smaller companies. Although over three years this is by far the strongest fund sector, last year the sector's funds lost around 5% on average. Again, the sector's top five funds more than made up for this.

The UK All Companies sector provides a striking example of the January party atmosphere. Standard Life Investment Management had a torrid time last year. In particular, its UK Equity Unconstrained fund, run by Edward Legget, a Citywire Selection favourite and a membrer of our Top Stocks panel, lost more than 20%. It clawed back nearly 10% in January.

While corporate bonds also rallied, the same was not true of funds investing in UK government gilts. The sector is the best performing over the past 12 months, with the average fund gaining an astonishing 18.1%. This flight clearly stalled in January, with no fund in the sector making signficant gains.

Quite a few years ago I changed my Virgin tracker ISA to a Manek "growth" ISA.

What a humungus mistake that was! Within a month it had lost 60% of its value and never recovered. I see that things haven't changed much. Nowadays I could easily beat Manek's miserable performance myself.